This page belongs to: National Rail Procurement and Manufacturing Strategy

Executive summary

The National Rail Procurement and Manufacturing Strategy (the strategy) is a key part of the National Rail Manufacturing Plan (NRMP)[1]. The strategy outlines how the Australian government will work with states and territories, industry, unions and other stakeholders to help deliver a more collaborative approach to passenger rolling stock procurement and grow a competitive rail manufacturing sector.

Stakeholders have highlighted a range of barriers that stand in the way of achieving this goal, including workforce and skills shortages. However, the biggest structural challenge is the fragmented nature of the Australian market in passenger rolling stock. States and territories lead on passenger rail procurement, with decisions focused on local outcomes. Suppliers seeking a national presence must navigate competing local content policies, different and complex procurement processes, inconsistent technical and manufacturing standards and incomplete information about the national forward pipeline of work.

These inconsistencies make it hard for companies bidding for work, provide little incentive for longer term investment in manufacturing capacity or capability and undermine the ability of companies across the supply chain to achieve scale and efficiency. The result is a higher price tag for our trains and trams, and skilled workers lost to more stable sectors. 

The strategy sets out actions, grouped under 6 pillars, to address these challenges.

  • Pillar 1: Develop a nationally coordinated approach to rolling stock procurement 
  • Pillar 2: Harmonise standards for manufacturing rolling stock
  • Pillar 3: Adopt a national local content approach
  • Pillar 4: Maximise opportunities for freight and heavy haul rail manufacturing
  • Pillar 5: Improve research and innovation outcomes in the rail sector
  • Pillar 6: Establish the foundation for good jobs and rewarding careers in rail manufacturing

Pillars 1 to 3 seek to drive a national approach to rolling stock procurement, removing the barriers to achieving scale and efficiency and providing a clearer case for investment in new manufacturing capability and capacity. It will help create the conditions for companies across the supply chain to achieve greater stability, with positive impacts on workers and local economies.

Pillar 4 addresses the opportunity of bringing scale, coordination and collaboration to the domestic manufacture of heavy haul and freight rolling stock which is used in mining, agriculture and other commodity sectors. World-leading work is underway in the Pilbara in Western Australia to design and build heavy haulage and freight wagons that withstand heat and dust. Queensland is investigating the use of batteries and hydrogen in heavy haul rail. Victoria’s condition monitoring technology is already being used in heavy haul rail. This strategy will investigate options to connect these kinds of initiatives and explore opportunities to strengthen heavy haul and freight rail manufacturing nationally.

Pillar 5 considers how to leverage our research and innovation systems to help ensure Australia’s rail manufacturing sector can meet current and future challenges and grow export markets. Mass production of low-value products will not deliver the high value-add opportunities that will most benefit our national economy or grow our export potential. But Australia’s advanced engineering design skills need to better link with our rail manufacturing supply chain to increase local production of rolling stock components and create a sustainable and stable demand. The strategy will deliver on these outcomes. 

Finally, Pillar 6 is about helping to build the workforce required to deliver these projects in Australia. That requires working with businesses, unions, experts and education institutions to ensure that vocational training and skills delivery support good, well-paid jobs and careers that are attractive to young people, broaden workforce participation and lift productivity. The strategy will build on the work already underway in this space, including the work of Jobs and Skills Australia.